The Wall Street Journal reports that Russia has taken another step closer to defaulting on its sovereign debts after an industry watchdog overseeing the credit-default swaps market ruled Wednesday that Russia failed to meet its obligations to foreign bondholders when it paid them in rubles earlier this month. While Russia has continued to deny reports that it is close to default on its sovereign debts, analysts say that payments for the subject bonds in any currency other than the US dollar would constitute a breach of contract. Following the decision, credit-default swaps tied to Russia’s creditworthiness can be triggered if Russia fails to make dollar payments before a grace period expires on May 4. The current upfront cost of buying a five-year contract for a Russian credit-default swap is roughly 73% of the total value of the debt to be insured, implying a default probability of 93%.
The bankrupt Roman Catholic Diocese of Camden, New Jersey, has agreed to pay $87.5 million to more than 300 sexual-abuse victims, as reported by The New York Times. Under the settlement agreement, the diocese will establish a trust to be funded over a four-year period, with claims against certain of the diocese’s insurance carriers to be assigned to the trust. The parties are seeking bankruptcy court approval of the settlement agreement by early June.
According to Law360, Ireland-based aircraft lessor Nordic Aviation Capital obtained bankruptcy court approval for its chapter 11 plan following support from 99% of the company’s voting creditors. Under the confirmed plan, which also had support of all existing shareholders, will wipe out more than $4 billion of debt by equitizing approximately $3.6 billion in secured debt and converting those obligations into 100% of the equity in the reorganized company, while also infusing $377 million into the reorganized company through a new equity rights offering. The company expects to emerge from bankruptcy by the end of May.